Such a move would increase the refinery's projected output to eight million tons per year.

The adjustment is in line with Vietnam's developmental strategy to integrate its oil and gas sector into the international market, explained the Prime Minister.

The project, which is a wholly foreign-owned joint venture between the United Kingdom's Techno Star Management and Russia's Telloil, was approved in 2007 with a total investment of US$1.7 billion.

Yet construction plans for the refinery were revised in October last year after a two-year delay due to the slumping economy.

Le Van Truc, deputy chairman of the Phu Yen's People's Committee, told news website thoibaokinhtesaigon on February 18 that construction on the project will get underway in the second quarter of this year.

Investment in the plant was recently raised to $4.3 billion, he said.

He also announced that the plant will be built on an 450 hectare plot in Dong Hoa Town, around ten kilometers from Vung Ro port, where it was originally set to be constructed on just 180 hectares.

The refinery is expected to begin operating in four years and will process crude oil imported from Russia and the Middle East into liquefied petroleum gas (LPG), jet fuel, gasoline, diesel fuel, polypropylene, benzene and sulphur.

The PM has also pledged not to apply tariffs on the refinery's exports once it becomes operational.

Currently, the Dung Quat factory in the central province of Quang Ngai is the country's only operating refinery facility.

The plant is aimed to have its capacity increased to 10 million tons per year from its current output of 6.5 million tons.

Vietnam's second refinery, Nghi Son in the northern province of Thanh Hoa, is scheduled to begin operating in 2017.

Work on the refinery, which is a joint-venture between PetroVietnam, Kuwait's Petroleum Group, and Japan's Idemitsu Kosan Petroleum Group and Mitsui Chemicals, is scheduled to begin in May this year and finish in the last quarter of 2016.

With a planned output of 8.4 million tons per year, the Nghi Son refinery is expected to meet around 40 percent of the country's oil and gas demand.